Share this:

Three more states are moving toward repealing taxes on the sale of gold and silver bullion.

Last week, Alabama Gov. Kay Ivey signed a bill into law exempting the sale of gold and silver bullion from state sales and use tax. The repeal of the tax not only lowers the cost of investing in gold and silver, it will also open the door to using precious metals in everyday transactions, and it takes the first step toward breaking the Federal Reserve’s monopoly on money.

Sen. Tim Melson (R-Florence) sponsored Senate Bill 156. The new law exempts the gross proceeds from the sale of gold, silver, platinum, and palladium bullion in the form of bars, ingots or coins from sales and use tax in the state for five years after the date of enactment.

The House passed SB156 by a 100-0 vote. The Senate approved the measure by a 26-0 vote. With the governor’s signature, the new law will go into effect June 1.

A similar bill passed in Wyoming last week and is waiting for action by the governor. Titled the Wyoming Legal Tender Act, House Bill 103 defines gold and silver specie as “legal tender,” meaning it would be recognized as a medium of exchange for the payment of debts and taxes in the state. It would prohibit the state or local governments from levying any property, sales of capital gains taxes on gold or silver specie. Practically speaking, gold and silver specie would be treated as money, putting it on par with Federal Reserve notes in Wyoming.

Ron Paul produced a video asking Wyoming residents to contact Gov. Matt Mead and urge him to sign a bill. He noted that things move agonizingly slow in Washington D.C. Passing bills like this at the state level are an important step toward real monetary reform.

“It’s just to me sad that we are so far removed from the Constitution. But a little bit here and a little bit there, there is going to be a revolution in monetary policy.”

Paul emphasized that monetary reform is an important step toward reducing the power of the federal government.

“Believe me, the size and scope and interference of government would change a whole lot if we could rein in the monetary system, rein in the Federal Reserve and rein in this spending.”

A bill that would exempt gold and silver bullion, along with other precious metals and some coins, from state sales and compensating use tax is also working its way through the Kansas legislature. The House Taxation Committee passed HB2421 on March 8.

We Shouldn’t Tax Money

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what Alabama’s sales tax on gold and silver bullion did. By removing the sales tax on the exchange of gold and silver, Alabama will treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

Practically speaking, eliminating taxes on the sale of gold and silver will crack open the door for people to begin using specie in regular business transactions. This will mark an important small step toward currency competition. If sound money gains a foothold in the marketplace against Federal Reserve notes, the people will be able to choose the time-tested stability of gold and silver over the central bank’s rapidly-depreciating paper currency.

There are already signs of the tax repeals impact. According to Coin Week, the state can now host major coin shows.

“We have discussed the possibility of hosting a show in Alabama, however, we have been reluctant because of the sales-tax obstacle,” President of Whitman Publishing president Mary Burton said. “The new law allows us to once again give serious consideration to hosting a successful show in Alabama.”

Background Information

The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” States have simply ignored this constitutional provision for years. It’s impossible for a state to return to a constitutional sound money system when it taxes gold and silver as a commodity.

This Alabama tax repeal, and bills moving through the process in Wyoming and Kansas, take a small step toward that constitutional requirement, ignored for decades in every state. Such a tactic would set the stage to undermine the monopoly of the Federal Reserve by introducing competition into the monetary system.

Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.

“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there.

The enactment of the Alabama bill and passage of the Wyoming Legal Tender Act are part of a broader movement as states continue to pass measures that chip away at the Federal Reserve’s monopoly on money by facilitating and encouraging the use of gold and silver.

Share this:

Related

Related Posts

Could we be on the verge of a retail apocalypse? February marked the third straight month of declining retail sales. Analysts had not expected another drop, but they got one nonetheless. Sales fell 0.1% in February. Analysts had expected an uptick of 0.3%. This is not good news for a retail sector that is already teetering on […]

President Trump’s new economic adviser did an interview on CNBC’s Closing Bell Wednesday and offered a little investment advice. I would buy King Dollar and I would sell gold.” So, should you follow Larry Kudlow’s guidance? Of course, that’s up to you. But Kudlow doesn’t have the best track record when it comes to predicting […]

Retail sales unexpectedly fell again in February. It was the third straight monthly drop and the first time the US economy has seen three straight months of declining retail sales since 2012. Sales fell 0.1% in February. Analysts had expected an uptick of 0.3%. According to CNBC, households cut back on purchases of motor vehicles and other big-ticket […]

Turkey went on a gold-buying spree in 2017. That trend continued through the first two months of 2018 as the country continues to diversify away from foreign currencies – i.e. the dollar. Data released by Borsa Istanbul shows Turkey imported 44.47 tons of gold in January and 16.03 tons in February for a total of […]

Archives

Search

My wife and I have purchased metals from a number of companies and were never comfortable with the way they pushed numismatic coins. After we placed an order for Double Eagles with SchiffGold, you called back and explained how we could get a better p…

John s.

I was impressed by SchiffGold, because you did what you said you were going to do. I have bought silver from two other major sellers of metals and was disappointed both times, one for the quality of the product and the other for taking months to deli…

Scott T.

My order came safe and sound, and I have been telling others that SchiffGold is the best way to buy physical gold. The company we bought from before we changed to SchiffGold asked for social security numbers and sold our name to many aggressive coin …

Becky K.

I was very pleased with my recent purchase. I appreciate the smooth process and very quick shipping with tracking numbers. My next purchase will be one or two bags of junk silver coins. I already have 1/2-ounce rounds, so now I want a smaller denomin…

Paul P.

The metals arrived sooner than I expected. The delivery process was great. I will be contacting you soon for another order, and I will gladly pass your name to anyone I know is interested in investing in precious metals.

Craig D.

SchiffGold is not one of the ‘name brand’ gold sellers one hears about constantly on TV. But I follow Peter’s commentary on the market and his thoughts on gold, and felt I would give his company a try. I’m glad I did, as I received my gold very quick…

Bob M.

I am very happy with my recent shipment. I felt that SchiffGold got me the best deal that I could get—a true ally in this investment! I will be using you guys in the future.

Charles M.

One of the biggest concerns I had when purchasing precious metals for the first time was sending funds overseas to a company that was new to me. However, I was put at ease by the fact that my friend had taken large deliveries from SchiffGold without …

Richard C.

Every senior broker at SchiffGold is a libertarian who is a student of Austrian Economics and not your average salesman. Everybody is extremely knowledgable about the markets, the current state in Washington, and of course precious metals. I ordered …

Daily Paul Reader

I received the latest shipment earlier today. All looks great! Delivery is extremely quick. If I know of someone who is interested in physical metals I will definitely pass them onto you. I was very leery about a service like this (phone, email, wiri…